Friday, May 03, 2013

Australian Telco's institutional policy rips-off Millions of dollars from consumers.

The scam goes like this... you subscribe to a mobile telephone plan that includes a 5Gb per month data usage. The monthly anniversary is, say, on the 15th of each month. You exceed your data usage on the 10 of the month and purchase an additional top-up allocation of 1 to 5 Gb which expires on the 10th of the following month.

On the 15th you have only used a proportion of your top-up allocation when you then regain a new 5Gb data entitlement as part of your normal monthly contract. Your account shows now shows you have 4 Gb left from your top-up, which expires on the 10th of the next month plus a new allocation of 5Gb which expires on the 15th of the next month.

Now here is where the rip-off begins to occur.

The Telco provider, In my case DODO but the scam applies equally to all Telcos, deducts your data consumption from your standard 5Gb allocation (Expiry date 15th) but you use up the 5GB again on the 10th of the following month only to find that your 4GB that you had purchased and remained unused has expired and is no longer available. You are forced into buying a new data-top-up. Had the Telco deducted your consumption for the account that expired first (FIFO) you would still have 4Gb to use prior to your next monthly anniversary of your account.

I asked my provider why they deducted my data consumption from my normal allocation which expires on the 15th of the month and not the data allocation that expires earlier on the 10th?

In discussion of this issue with Peter (Undisclosed surname) , Disputes Resolution Officer with Dodo Australia Pty Ltd, Peter indicated that the deduction of data from the Monthly allocation in priority of the top-up package is a deliberate corporate policy. Designed of course to force you into buying more data-top up packages.

Millions of dollars rip=off Australian consumers as a result

If you multiply this scam by millions of account holders, and remember this does not just apply to DODO but also to other telco providers, the amount ripped off from Australian consumers adds up to millions of dollars. This in my view is unconscionable. Peter from DODO said it was unethical but not unconscionable.

DODO offered to provide a "bonus $5.00 1GB of data in compensation". Problem is this offer is useless as the data would expire prior to the expiration of my next monthly data allowance and I would not benefit from it.

Peters reply "if I did not like it then I can cancel my account". Why should I? In all other aspects I am happy with the service. It's just the policy of deducting my data consumption from the wrong account in the wrong order.

The issue is not about the five or twenty dollars spent on buying additional data allocation, it is the principle of consumer fairness. The Telcos should be deducting data consumption from whichever account allocation expires first. (FIFO)

I wait with interest to see if the Telecommuncations Ombudsman is capable of addressing this issue. If not this may require a class action law suit before the rip-off, costing Australian consumers Millions of dollars, is addressed.

A link to this post has been sent to the Stephen Conroy and Opposition Spokesperson Malcolm Turnbul.